All Forum Posts by: Sterling Wyatt

@Greg Moore just seeing this thread and enjoying the responses. I had heard stories about Bitcoin for yrs, but never took the time to understand it. The first time you come across it, it sounds kinda crazy. But about a year ago I started researching it more, read some books and subscribed to some podcasts, and went through the process of setting up accounts with exchanges and buying some cold storage wallets really to just gain an understanding of how it works. As I learned more about what a halving was, the limited amount to be produced, and how many are thought to be gone for ever (lost on hard drives of early buyers as computers were discarded), the more I’ve felt comfortable with it. As for a percentage, I try and keep a certain percentage in RE, PM’s, Stocks, Infinite Banking Life Ins, and I’ve added Bitcoin to my mix. Everything is in a bubble right now, but Bitcoin has the potential for the biggest gain, as well as the biggest drops, so I’m looking at my account as two part, one portion being a long term play of buy and hold, and another portion to trade on highs and dips. It’s a similar concept to gold-which I’m a fan of, but it’s way easier to move in and out of positions than physical metals. The fact that the majority of the population would not know how to buy it if you offered them a million dollars if they could buy one Bitcoin in 30 minutes makes me believe that even though it’s had a big run up in 2017 and this yr, there is still huge potential. I buy through a couple of exchanges, but recently have been using SwanBitcoin as you can set up automatic withdrawals on weekly or monthly purchases for dollar cost averaging. My goal is to have 8-10% as a percentage. RE is still my largest % holding. But if right now someone asked me if I could have $10k of free $ to put in stocks, gold, or Bitcoin, I’d put it in Bitcoin.

@Michael Morin This is what I do. I have a first lien HELOC on my primary residence. If you open a checking account with the same bank, you can move $ in and out very easy like a business line of credit. I've done several hard money loans using my HELOC, then when it's paid back the money goes back into the HELOC. I also move all my W2 income from checking into HELOC, and pull out what I need at the end of the month for bills. Right now I'm in the process of closing on a SFH, where I used my HELOC for the down payment and obtained permanent financing for the balance. A first lien HELOC gives you a lot of flexibility, you can pay it down faster but still have access to your equity if investment opportunities present themselves. I had a good bit of equity in my home, so like a few of the other posts mention I don't usually utilize more than 75-80% of it at a time. If you have $100k equity, and looking at $100k rental, I'd use $20k from HELOC as down pmt and obtain a bank loan for the rest, rates are under 4% right now.

Forget about Kiyosaki, not promoting or debating him, just the thought concept that was brought up in the conversation.

My understanding on why the Fed has printed so much $ and there hasn't been a huge rise in inflation, is that most of that money has gone to banks to shore up their balance sheets and cash reserves and hasn't made it to main street yet.  Once it does inflation will increase, but it also depends how you define inflation-what's included.  Houses have certainly gone up in most areas, cost of college, and a lot of food costs.  The Fed would love for us to spend more I'm sure.  I just saw where Australia's latest Treasury auction offered negative rates.  Might happen here in the not too distant future maybe?  I appreciate everyone's comments on this thread, and what I've gathered is it sounds like they were trying to say to take on as much low rate fixed debt as your comfortable with (with some emergency cash reserves available), and as we get rising inflation, the value of the rents and RE will increase at a higher pace than in the past, thus eating away the % of your $ required to pay your mortgages, and the creditors will be the ones on the short end of the stick?

Yeah, I read Rich Dad Poor Dad years ago, but he was a guest on Gammon's show, and he wasn't selling anything.  George Gammon mentioned the concept, and I've heard it before, but still trying to wrap my mind around exactly what they mean "debt is the asset, the property is the liability".  I think they basically meant with rates so low, and higher inflation likely coming, inflation will eat away the debt.

Would I be correct to state that using the house to secure a mortgage at say 4%, and inflation is running at 8%, you could theoretically say inflation is eating the dollar denominated value of the mortgage by 4%, thus adding 4% to your rate of return?  Is that the right way to look at it?

I should have used self directed IRA LLC to lend money, then points and interest would not have been taxed, and I should have bought the rental with HELOC $ as down payment instead of putting it in IRA, because I lost some tax write off's. I got them backwards basically in the beginning, but learned what money to use and where to put things as I went. Still glad I jumped in, but didn't have proper guidance at the time. To me that is why its important to find people there locally you can bounce things off of and listen and learn from.

@Danielle Dickens

I started out in similar situation a couple of years ago. I've used HELOC for short term lending, and down payments on rental properties. Think of your HELOC as a business line of credit that you can move $ in and out of. I also use a self directed IRA and Infinite Banking Life Ins policy to access cash. I would classify myself as a novice passive investor, but I would say the most important thing for me has been networking with others who know more than me. I've had to get out of my comfort zone going to luncheons and meet ups where I didn't know anyone, but as I've gotten to know people, they introduced me to others who have tons of knowledge and experience. In the beginning I was anxious to get started and made some minor mistakes but learned a lot. For instance my first short term lending deal I used HELOC $, and used SDIRA $ for actual rental property, and I've learned from tax purposes I got those backwards. The more deals you do, the more people you'll meet, and to me as a part time passive investor, the network of people I've gotten to know and work with is the most valuable thing for me personally.

Was listening to podcast by George Gammon and Robert Kiyosaki recently. They made the comment that with high market valuations for most RE right now, and record low interest rates, that the debt is now the asset, and the property is now the liability. I think I get what they were trying to say, but can anyone expand in that comment?